Dual-Class Shares Explained — How Founders Vote More Than They Own

How Does Zuckerberg Control Meta With Just 13% of the Equity?

Mark Zuckerberg's economic stake in Meta — his actual claim on the company's assets and earnings — sits at around 13%. Yet at shareholder meetings, he casts 61% of the votes. That's not a typo: it's the direct result of dual-class share structures, also called differential or multiple voting rights. Most people assume every public company runs on a simple rule — one share, one vote — but a number of companies deliberately break that rule, and Korea has now started allowing a narrow, time-limited version of the same idea. This lesson covers what dual-class shares actually are, why the structure exists in the first place, and how the U.S. version compares to Korea's new multiple-voting-rights rule for venture founders.

What Dual-Class Shares Are — Breaking the One-Share-One-Vote Rule

One of the most basic assumptions built into corporate law is one share, one vote: if you own 1% of a company, you should get exactly 1% of the say at its shareholder meetings. That rule ties your economic stake (how much you gain or lose) directly to your decision-making power (how much of a voice you have).

A dual-class structure deliberately splits those two things apart. The company issues two or more classes of stock, and each class carries a different number of votes per share. The common pattern: shares sold to the public (Class A) get one vote each, while shares held by founders and executives (Class B) get ten votes each — sometimes twenty or more. Two shareholders can own the same company, on paper, and still have wildly different amounts of say over what it does.

Why the Structure Exists — the Founder-Dilution Problem

Dual-class shares grew out of a very different problem than the ones behind holding-company discounts or circular shareholding — this one comes straight from how startups raise money. A startup that wants to grow has to raise outside capital again and again, and every new funding round issues new shares, diluting the founder's ownership a little more each time. A founder who started out owning 90% of the company can easily end up owning single digits by the time the company goes public, after a string of Series A, B, C rounds.

The risk is that once ownership falls that low, board control — and effectively the company's whole direction — can slip to outside investors or an activist fund. A founder who wants to keep steering the company's long-term strategy can't necessarily do that on ownership percentage alone. Dual-class stock is one answer to that: it lets a founder hand over economic ownership to investors while holding onto decision-making power, as a deliberate, structural trade.

Dual-Class Shares in the U.S. — Meta and Alphabet's Class Structures

In the U.S., Alphabet (Google's parent), Meta, and a number of other big tech and media companies have kept dual-class structures in place well after going public. Alphabet has three classes: Class A (GOOGL, one vote per share), Class B (not publicly traded, ten votes per share, held by founders Larry Page and Sergey Brin), and Class C (GOOG, no votes at all). Between them, the two founders reportedly control roughly 52.7% of the total vote through their Class B holdings. Meta's structure is simpler — just Class A (one vote) and Class B (ten votes) — but Zuckerberg owns 99.7% of the outstanding Class B shares, which is exactly how a 13%-ish economic stake turns into 61% of the vote.

Companies that adopt this structure generally justify it as protecting founders from short-term earnings pressure so they can make long-term calls without getting second-guessed every quarter. There's some truth to that — it can genuinely insulate a founder from takeover threats or activist-investor campaigns. But critics point to the flip side: a founder can cash out most of their economic stake and still control the company through voting power alone, which weakens the check that ordinary shareholders are supposed to have over management.

Why the 2026 Recapitalization Votes Failed

Just how real this tension is showed up clearly at the 2026 annual meetings. Both Meta and Alphabet put a so-called "recapitalization" proposal to a shareholder vote — a motion to scrap the dual-class structure entirely and move to one-share-one-vote. Because the founders themselves hold such an overwhelming share of the vote, the proposals were effectively dead on arrival at the full-shareholder level. And in fact, a majority of independent (non-insider) shareholders voted in favor. But counted across all votes cast, the proposals landed at roughly 26.5% support at Meta and 31.2% at Alphabet — nowhere near enough, because the very structure being challenged is what decided the outcome. It's a clean illustration of how, once a dual-class structure is in place, outside shareholders alone have almost no path to undo it.

Korea's Multiple-Voting-Rights Stock — Narrow, and Built to Expire

Korea held onto the one-share-one-vote principle without exception for a long time. That changed with a 2023 amendment to the Venture Company Act, which opened a narrow path for founders of unlisted venture companies to issue multiple-voting-rights stock under strict conditions. The problem it targets is exactly the founder-dilution issue described above: when a heavy round of outside investment leaves a founder's control genuinely at risk, the rule lets that founder hold shares carrying more than one vote each, so the company can keep running under stable leadership.

Compared with the U.S. version, though, Korea's rule is far narrower and explicitly temporary from the start. The eligibility bar alone is strict: the company must have raised at least ₩10 billion cumulatively since founding, with its most recent funding round alone bringing in at least ₩5 billion, and as a result of that dilution the founder's stake must have fallen to 30% or below (or the founder must have lost status as the largest shareholder). The voting multiplier is capped too — between 2 and 10 votes per share, nowhere near the effectively unlimited ratios seen in the U.S.

The bigger difference is in how long it lasts. Korean law caps the duration of multiple-voting shares at 10 years, set out in the company's articles of incorporation, after which they automatically convert to ordinary shares. They also convert immediately the moment the founder inherits them to someone else or transfers them to a third party, or the moment the founder stops serving as a director. Most notably, once the venture company actually lists on a stock exchange, the multiple-voting shares convert to ordinary shares automatically three years after the listing date — no exceptions. That's a fundamentally different design from Meta or Alphabet, where the structure survives indefinitely after an IPO. On top of that, even while the multiple-voting shares are active, the founder gets only one vote per share — same as everyone else — on specific matters: approving director compensation, reducing directors' liability, appointing or removing auditors, reducing capital, deciding dividends, and changing the duration of the multiple-voting shares themselves.

U.S. Dual-Class vs. Korea's Multiple-Voting-Rights Rule

Laying the two systems side by side shows how deliberately narrow Korea's version is.

	U.S. Dual-Class (Meta, Alphabet)	Korea's Multiple-Voting-Rights Rule
Who can use it	Broadly available, listed or unlisted	Only unlisted venture-company founders meeting strict criteria
Voting multiplier	Effectively unlimited (10x, 20x+ seen in practice)	Capped at 10x
Duration	Can persist indefinitely, no expiry	Capped at 10 years, set in advance
After an IPO	Structure typically survives unchanged	Converts to ordinary shares automatically 3 years after listing
On inheritance/transfer	Generally continues, or follows company-specific rules	Converts to ordinary shares immediately
Scope of extra votes	Applies to nearly all matters	Falls back to 1 vote per share on specific matters (auditor appointment, director pay, etc.)

A Worked Example

Take a hypothetical unlisted venture company, Company V. Through several funding rounds it has raised ₩12 billion cumulatively, with ₩6 billion from the most recent round alone, and as a result the founder's stake has fallen to 22% — clearing the ₩10 billion / ₩5 billion / 30%-or-below thresholds. Company V has 10 million shares outstanding, and the founder holds 2.2 million of them (22%). Suppose the company's articles grant the founder's shares 5 votes each under the multiple-voting-rights rule.

	Shares	Votes per share	Total votes
Founder's stake (multiple-voting)	2,200,000 (22%)	5	11,000,000
Everyone else (ordinary shares)	7,800,000 (78%)	1	7,800,000
Total	10,000,000	—	18,800,000

The founder owns just 22% of the economic pie but controls 11,000,000 of the 18,800,000 total votes — about 58.5% of the vote. A clear minority stake translates into a comfortable voting majority. But if Company V eventually lists on an exchange, those 2.2 million shares automatically convert to ordinary shares three years after the listing date, and the founder's voting power drops right back down to 22%. Under a U.S.-style structure, by contrast, that 58.5% could remain intact indefinitely, even after going public.

What Investors Should Understand

Investing in a company with dual-class or multiple-voting shares means investing in a company where economic interest and decision-making power are already out of alignment. That's not automatically a bad sign — an investor who trusts the founder's long-term vision and wants it executed without short-term pressure might see the structure as a genuine advantage. What matters is understanding how it changes the math elsewhere. As covered in the mandatory tender offer rule, a would-be acquirer's ability to pay a control premium and actually take over a company depends on being able to out-vote the existing controller — and a dual-class structure makes that dramatically harder no matter how many shares get bought. If you're looking at a U.S. stock, check whether the structure is designed to persist indefinitely after listing; if it's a Korean venture company, check the specific conversion triggers — the 3-year post-listing clock, inheritance, transfer. Reading the actual share-class structure and voting multipliers in a company's filings or articles of incorporation is the basic first step to evaluating any company built this way.

Takeaways

• Dual-class (multiple-voting-rights) structures assign different numbers of votes per share across share classes, deliberately separating economic ownership from voting control.
• Meta's Class A/Class B setup (1 vote vs. 10 votes) gives Zuckerberg 61% of the vote on a 13%-ish economic stake; Alphabet's Class A/B/C structure gives its founders roughly 52.7% of the vote.
• At both companies' 2026 annual meetings, proposals to scrap the dual-class structure failed despite majority support among independent shareholders — blocked by the founders' own outsized voting power.
• Since a 2023 amendment to Korea's Venture Company Act, unlisted venture-company founders who meet strict criteria (₩10 billion cumulative funding, ₩5 billion in the latest round, ownership down to 30% or below) can issue multiple-voting shares carrying up to 10 votes each.
• Korea's version caps duration at 10 years, converts immediately on inheritance or transfer or loss of director status, and converts automatically three years after listing — fundamentally different from the U.S. structures that can persist indefinitely post-IPO.

FAQ

Are "dual-class shares" and "multiple voting rights" the same thing?

"Dual-class" is the broad, general term for any structure where different share classes carry different numbers of votes. "Multiple-voting-rights stock" is the specific legal term used in Korea's Venture Company Act. In practice the two terms are used almost interchangeably, but when discussing Korean law specifically, "multiple-voting-rights stock" is the precise term.

Can a listed Korean company issue multiple-voting shares?

No. The current rule only allows unlisted venture companies meeting the eligibility criteria to issue them, and even if that company later lists on an exchange, its multiple-voting shares automatically convert to ordinary shares three years after the listing date. That's a clear break from U.S. structures, which can persist indefinitely after an IPO.

Does this structure disadvantage ordinary shareholders?

It's not simply good or bad. An investor who supports the founder's long-term decision-making may see it as a plus, but it also limits opportunities tied to takeover premiums or outside oversight of management. Before investing, it's worth checking the company's actual share-class structure, voting multipliers, and any conversion conditions directly.

⚠️ This article is for informational purposes only and is not investment advice. You are solely responsible for your own investment decisions and their outcomes.